KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Key Points:
Economic Skepticism: UK economists are skeptical about the Labour government's ability to significantly accelerate economic growth under Keir Starmer’s leadership. Many anticipate that the slow expansion experienced over the past decade will persist.
Growth Projections: According to Bloomberg’s monthly survey of 56 forecasters, the UK economy is expected to grow by 0.8% in 2024 and 1.3% in 2025. These projections are only marginally higher, by 0.1 percentage points, than those in the previous survey.
Fiscal Policy Concerns: While a looser fiscal policy is anticipated under new Chancellor Rachel Reeves, economists remain doubtful that Labour can substantially improve the UK’s long-term growth prospects.
Challenges Ahead: The survey highlights the significant challenges facing the Labour administration in revitalizing the economy. Keir Starmer has committed to implementing a range of policies aimed at boosting economic activity, which are crucial for funding improvements in public services like schools, hospitals, and railroads.
Policy Announcements: Labour has pledged to elevate UK growth to the highest in the Group of Seven (G7), though specific details on achieving this goal have been limited. Recent announcements include changes to the planning system and the establishment of a National Wealth Fund to encourage building and investment. The government also aims to foster closer ties with the European Union and maintain political stability to boost business confidence.
Expert Opinions: Dennis Shen, a senior director at Scope Ratings, commented that without a significant growth surge, budget consolidation will be challenging. He noted that while potential reforms could support medium-term growth, the estimated trend growth rate of 1.5% annually remains unchanged.
Survey Insights:
- Only three out of twelve economists believe Reeves will successfully increase the economy’s sustainable growth rate.
- One out of nine economists indicated they would upgrade their growth forecasts based on Labour’s recent electoral victory.
- Eight out of eleven respondents expect a looser fiscal policy than what Labour's manifesto suggests.
Economic Data: Despite the skepticism, recent data has shown positive signs. The economy grew by 0.4% in May, doubling economists' expectations and indicating potential for solid expansion in the second quarter following a 0.7% GDP increase in the first quarter.
Outlook: Deutsche Bank's chief UK economist, Sanjay Raja, noted that the starting point for the economy is slightly better than previously expected. However, he warned of a “deteriorating fiscal picture” due to higher-than-expected inflation and market rate expectations exceeding those used in the spring Budget.
Comments
Post a Comment